August – New Detroit Incorporated is formed in the aftermath and in response to the events of late July 1967. It is billed as “the nation’s first urban coalition” – a cooperative of business, government, labor and community leaders, which is intended to heal the social problems that caused the recent civil unrest.
The shifting nature of the work force stimulated by the rapid growth of the auto industry had an important impact on the city’s future development. The new workers came from diverse and soon far-flung sources. Near-by Canada was important early on, many of the workers came from Eastern and southern Europe, a large portion of them being ethnic Italians, Hungarians and Poles. An important attraction for these workers was that the new assembly line techniques required little prior training or education to get a job in the industry.
Oakland County, north of the city, became a popular place to live for executives in the industry. “By the second half of the twentieth century it was one of the wealthiest counties in the United States, a place profoundly shaped by the concentration of auto industry derived wealth.”
These decentralizing trends, combined with the auto industry itself, which fed reductions in public transit funding and service, made Detroit look much more like Los Angeles than the metropolises of the East. Public policy was automobile oriented. Funds were directed to the building of expressways for automobile traffic, to the detriment of public transit and the inner city neighborhoods through which they were cut to get to the auto factories and the downtown office buildings.
These processes, in which the growth of the auto industry had played such a large part, combined with racial segregation to give Detroit, by 1960, its particularly noteworthy character of a substantially African-American inner city surrounded by mainly white outer sections of the city and suburbs. By 1960 there were more whites living in the city’s suburbs than the city itself. On the other hand, there were very few African-Americans in the suburbs. Real estate agents would not sell to them, and if African-Americans did try to move into suburbs there was “intense hostility and often violence” in reaction.
The auto industry too was decentralizing away from Detroit proper. This change was facilitated by the great concentration of automobile production into the hands of the “Big Three” of General Motors, Ford, and Chrysler. The Big Three were able to put nearly every smaller competitor auto-maker out of business. While this corporate concentration was taking place, the Big Three were shifting their production out of central Detroit. Between 1945 and 1957 the Big Three built 25 new manufacturing plants in the metropolitan area, not one of them in the city itself.
The number and character of these new, suburban auto factories was a harbinger of future trends detrimental to the economic health of Detroit. There was an interaction between factory decentralization and the nature of the industry’s post-New Deal unionized labor force. Ford Motor was one of the first to undertake major decentralization, in reaction to labor developments. Ford’s workers voted to join the UAW in 1941. This led Ford to be concerned about the vulnerability of its huge, flagship Rouge River plant to labor unrest.
The workers at this plant were “among the industry’s most well-organized, racially and ethnically diverse, and militant.” A strike at this key plant could bring the company’s manufacturing operations as a whole to a halt. Ford therefore decentralized operations from this plant, to soften union power (and to introduce new technologies in new plants, and expand to new markets). Ford often built up parallel production facilities, making the same products, so that the effect of a strike at any one facility would be lessened. The results for the River Rouge plant are striking. From its peak labor force of 90,000 around 1930, the number of workers there declined to 30,000 by 1960 and only about 6,000 by 1990. This decline was mainly due to automation.
The spread of the auto industry outward from Detroit proper in the 1950s was the beginning of a process that extended much further afield. Auto plants, and the parts suppliers associated with the industry, were relocated to the southern U.S., and to Canada and Mexico. The major auto plants left in Detroit were closed down, and their workers increasingly left behind. When the auto industry’s facilities moved out, there were dramatically adverse ripple economic effects on the city. The neighborhood businesses that had catered to auto workers shut down. This direct and indirect economic contraction caused the city to lose property taxes, wage taxes, and population (and thus consumer demand). The closed auto plants were also often abandoned in a period before strong environmental regulation, causing the sites to become so-called “brownfields,” unattractive to potential replacement businesses because of the pollution hang-over from decades of industrial production.
The pattern of the deteriorating city by the mid-1960s was visibly associated with the largely departed auto industry. The neighborhoods with the most closed stores, vacant houses, and abandoned lots were in what had formerly been the most heavily populated parts of the city, adjacent to the now-closed older major auto plants.
By the 1970s and 1980s the auto industry suffered setbacks that further impacted Detroit. The industry encountered the rise of OPEC and the resulting sharp increase in gasoline prices. It faced new and intense international competition, particularly from Japanese and German makers. Chrysler avoided bankruptcy in the late 1970s, but only with the aid of a federal bailout. GM and Ford also struggled financially. The industry fought to regain its competitive footing, but did so in very substantial part by introducing cost-cutting techniques focused around automation and thus reduction of labor cost and number of workers. It also relocated ever more of its manufacturing to lower cost states in the U.S. and to low-wage countries. Detroit’s residents thus had access to fewer and fewer well-paying, secure auto manufacturing jobs.